Stockton California Bankrupt – Can Online Gambling Save CA

Stockton California this week became the largest city in the history of the United States to declare bankruptcy. But if online poker had been adopted in California, could this have been prevented? With state debts piling up nationwide, the regulatory and licensing fees alone could provide a much-needed shot in the arm for states struggling to finance their governments. And with millions of Americans already participating in online gambling every day, why not allow that money to stay here at home and benefit us in our own backyards?

California is considering online poker legislation which would require a nonrefundable $1 million to $5 million fee simply for applying for an interactive gaming license. That same legislation also calls for an initial licensing fee of $30 million for each company that wants the right to offer online poker to California’s residents. With Stockton, California owing more than $700 million which it claims it can not repay, that total could be made up virtually overnight in licensing fees alone. And California has been home to brick-and-mortar poker rooms for decades, so the infrastructure for a smooth transition to online gaming is already in place.

No one is claiming that legalized online poker play in California is a cure-all and end-all to the economic woes in that state, or in any other. But with a city budget deficit of $26 million in Stockton (population 300,000), if only $100 were generated per capita the first year from online poker revenue that city’s government would go from deficit to surplus while other states are struggling to keep their heads above financial flood levels. California’s neighbor to the east was the first US state to pass legislation allowing online poker play, and Nevada could begin receiving revenue from interactive gaming licensing fees next month.

And that is simply the cash infusion that online poker licenses in California could deliver. Jobs in the technology sector would be added, regulatory entities would need to be created, and ongoing policy committees and other state and city sponsored organizations would emerge. What exactly do the numbers look like? In 2011 alone more than $35 billion in revenues was posted by the United States commercial casino industry, not including Indian reserve casinos. And a full $7.93 billion in tax revenue was generated in the 22 states where commercial casinos operated last year. That was a 4.5% increase over 2010, according to the American Gaming Association.

Stockton California and cities like it did not get into this financial mess overnight. And no online gaming advocate is proposing that there is an overnight solution offered by legislating legalized online gaming in California or any other state. But California’s residents and legislators need look no further than the city of brotherly love, Philadelphia, Pennsylvania, for a staggering example of how positive the financial impact of online gaming can be. Philadelphia last year generated nearly $1,000 per resident in casino tax revenues through their brick and mortar casinos. And that means two basic truths are in evidence.

First, Philadelphians gamble. And secondly, the $1.45 billion Philly earned in casino tax revenues last year is certainly not a drop in a bucket. And that number could pale in comparison to the amount of money created by offering access to legal gambling options online. In a state with one of the richest poker histories in America, California would give its residents what they want, and earn substantial and possibly government-saving licensing and taxing revenue if online gaming legislation were passed in the Golden State.

Comments

Personally I think that online gambling could help the entire country just with tax revenue the feds could obtain (that is if they would actually apply it to the debt and not think of new ways to spend it). Could really help contribute to the solution for economic woes every state is facing.